Ikea’s FDI proposal gets Foreign Investment Promotion Board’s nod
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The government today cleared Ikea's proposal to invest around Rs 10,000 crore for setting up retail shops based on its global model in India. This means that the Swedish furniture maker will be able to sell secondhand furniture, textile goods, toys, books and consumer electronics along with food and beverage items in its cafeterias within its stores.
"The proposal has been cleared in its entirety by the Foreign Investment Promotion Board (FIPB)," an official said.
The decision comes a day before commerce and industry minister Anand Sharma leaves for Davos to attend the World Economic Forum and is aimed at sending positive signals to foreign investors.
India, last year, opened up its retail sector — both single and multi-brand — allowing 100 per cent and 51 per cent FDI respectively in the sectors. Ikea is the first major investment proposal in the single-brand retail to get clearance from the government. The Ikea business plan is the showpiece proposal for the government as part of its throwing open of investment into the retail sector.
The proposal will now be placed before the Cabinet Committee on Economic Affairs (CCEA) for final approval. Earlier, the FIPB had cleared the Ikea's proposal but subject to certain conditions. However, not satisfied with the decision, the retail major had again approached the department for a review. The FIPB took up the matter but more information was sought from the company regarding its plans in India.
"IKEA's case for investment is cleared, which is a positive development. The government is committed to playing a constructive role in enhancing FDI, especially in areas which create jobs and provide technological enhancement," Sharma said in a statement.
He added that globally Ikea has a business model, which integrates "in its embrace SMEs and domestic industry making them the part of global value chain".